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What Is A Revenue-Neutral Carbon Tax?

This post originally appeared at Speak Out CaliforniaMy post on the NASA climate scientist the other day mentioned a “revenue-neutral” carbon tax.
Here is the idea: You tax carbon-based “fossil fuel” energy at the source: when oil or coal or gas is originally extracted and sold you tax it. Then you divide up that tax money equally and give it to each citizen.
Giving the entire tax back makes it “revenue-neutral” meaning exactly as much that is taxed is given back. This means that the net effect on the overall economy is neutral. But it promotes the use of renewable, non-polluting energy sources which overall has a very positive effect on the economy whether you worry about global warming or not. (A more energy-efficient economy means everyone spends less to get the same results.)
What would this mean to most Americans? A $200 per ton carbon tax would roughly mean a $9000 check to each American family each year. This check offsets any higher prices that might be caused by the tax. If you use less carbon-based energy you come out way ahead financially. If you use more you pay more. Economists say that 4/5 of us would come out ahead. Only the richest 1/5 would pay more. And THEY can pay less by CHOOSING to using less energy. (What would a $9,000 check mean for families in this economy?)
This creates a huge incentive for everyone to become more energy-efficient, which means your costs go down. If you are a business energy-efficiency means you increase profits. If you are a family it means you spend less on electricity and natural gas. it’s the same idea as buying a Prius and then spending less on gasoline. But becoming energy-efficient means that those costs go away forever. If you install solar panels you never pay another electric bill. If you add insulation to your house your heating and cooling bills go down forever.
A carbon tax means that WE get that money, not the Middle East. It means that we have incentive to start building mass transit again. It means that research into alternative energy sources (killed by Republicans) gets started again.
AND it means that we are putting less and less carbon into the air.
You can learn more at the Carbon Tax Center.
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